Owners of vehicles purchased between 2004 and 2008 will receive their first payment of a refund of the tax paid on vehicle registration by April, Transport Minister Joe Mizzi said yesterday.
Addressing a press conference together with Finance Minister Edward Scicluna and Parliamentary Secretary for Justice Owen Bonnici, Mr Mizzi launched the seven-year scheme for the refund of VAT paid on the registration of new or second-hand vehicles registered between May 1, 2004, and December 31, 2008.
We are returning money stolen from the nation
The refund may be claimed on Category M1 vehicles registered for personal use (vehicles comprising no more than nine seats), Category NI vehicles (vehicles used for the carriage of goods not exceeding 3.5 tonnes), motorcycles and quad bikes. Government vehicles, vehicles used for hire, taxis and vehicles used for commercial purposes are not eligible.
All vehicles must have been registered and licensed in Malta.
The refund must be claimed by the first licensed owner, irrespective of whether the vehicle is still in his/her possession – meaning that even if the vehicle was subsequently sold or scrapped, the original owner would still be eligible for the refund.
The scheme does not include licensed vehicle dealers or importers, unless the dealer or importer proves that the vehicle was registered and licensed in his or her name and intended for personal use.
Prof. Scicluna said that the value of refunds would be between €25million and €30million, divided among some 40,000 vehicle owners.
Sixty per cent of applicants will be receiving between €500 and €1,000, with the average sum being €771. The amount due to each eligible applicant will be paid in instalments over the next seven years.
Prof. Scicluna said that the government had allocated €3.5million from this year’s Budget to pay the first instalment.
Mr Mizzi recalled that Prime Minister Joseph Muscat had talked about the injustice in 2008, a few months after he became leader of the Labour Party.
The then-Opposition leader had said that unless people who paid VAT on their vehicle registration tax were given their money back, the PL would launch a campaign for that purpose.
In 2009, the European Commission declared that the tax was illegal and did not conform with a European Court ruling.
“The Maltese government was obliged to hand the money back. Yet the preceding government not only refused to pay up but [former finance minister] Tonio Fenech alleged that we made the pledge to win over votes. We are returning money stolen from the nation,” Mr Mizzi said. The PL’s electoral manifesto had stated that a new Labour government would “refund consumers with the extra money paid for the VAT on vehicle tax registration that the government had taken from consumers who bought their vehicles between May 2004 and 2008. We will do this without increasing the burden on other citizens”.
The manifesto did not say, however, that the refunds would be issued in a staggered manner – as announced in this year’s Budget.
Dr Bonnici said that the government is also setting up a system of judicial review to ensure that applicants who are turned down have the right of appeal.
He added that the pending court case filed against the government by a group of people would be dropped.
“Since this was a class action, we will reimburse the fees incurred by the parties involved, which total €3,000. We recognise that these people were right.”
Transport Malta will be sending a letter to all eligible owners on the address stated on their current ID card in the first week of February, informing them of their due amount under the scheme.
From tomorrow, a customer care service line will be open to assist with any queries. People may phone 8007 2373 from Monday to Friday between 8am and 4pm or send an e-mail to grantscheme.tm@transport.gov.mt.